After several difficult months, things are looking up for Mattel. The California toymaker reported a 10% increase in gross sales for Q3 2020, to the tune of US$1.8 billion.
Disruptions to Mattel’s global manufacturing and distribution capacity related to the COVID-19 pandemic led to a 14% decline in the first quarter. In the second quarter, meanwhile, major brands like Hot Wheels and Thomas & Friends contributed to a 15% decline in gross sales.
The toy industry as a whole has bounced back in Q3 2020 as parents focus on consumer products purchases in an effort to maintain normalcy for kids, said Mattel CEO Ynon Kreiz during the company’s earnings call. The toymaker also benefited from increasing e-commerce efforts, with online sales up 50% compared to last year. In fact, online purchases now represent approximately 30% of the company’s overall sales.
Mattel’s dolls segment drove significant growth in the third quarter, with gross sales up 22% to US$690.5 million. Barbie was the biggest contributor to the increase, with US$532.2 million in gross sales for the brand (up 29%).
Gross sales for the action figures, building sets, games and other segment increased 14% to US$354.5 million in Q3. Brands like Star Wars and Jurassic World, as well as card games drove the growth.
The toyco’s vehicles segment saw US$369.4 million in gross sales (up 6% compared to the same period last year). This jump was driven by strength in the Hot Wheels brand.
Gross sales for the infant, toddler and preschool category, however, declined 6% to US$404.1 million during Q3. Weakness in Fisher-Price and Thomas & Friends contributed to the drop (as they did in Q1 and Q2 2020). Earlier this month, Mattel announced an animated/live-action Thomas & Friends feature film, as well as a new look for the TV property. Mattel is partnering with Nelvana for two new seasons of Thomas & Friends and making it 2D, rather than the previously 3D version by Jam Filled.
American Girl saw gross sales drop 2% to US$53.7 million during the third quarter due to lower sales in proprietary retail channels.
Gross sales in North America increased 13% in Q3 2020. Internationally, gross sales increased 7% during the same period. EMEA (up 18%) and Asia Pacific (up 4%) contributed to the growth, while Latin America saw gross sales drop 13%.
Looking forward, Kreiz said sales are expected to grow in the fourth quarter due to the early start of the holiday shopping season. Mattel is working with retail partners to meet consumer demand in Q4, while continuing to be “mindful” of the uncertainties around the ongoing COVID-19 pandemic.